The larger banking firms were coming in, and the community banks were going out.
NBT Bank had acquired Central National Bank and City National Bank, while First Niagara had picked up Mohawk Community Bank.
All of a sudden, the area banking industry was run by out-of-town companies.
Gordon Coleman, CEO of Patriot Federal Bank, left, looks on as bank teller Klaire Knapp works on a transaction for a drive-thru window customer.
The Leader-Herald/Bill Trojan
That put a thought in the heads of about 18 people who still believed there was a place for a community bank in Montgomery County. They came up with a plan to create Patriot Federal Bank.
"In Fulton and Montgomery counties, there were no locally owned, independent community banks," said Gordon Coleman, chief executive officer of Patriot Federal Bank and one of the 18 original organizers.
Coleman previously was president of Landmark Community Bank, which was bought by TrustCo.
The process of starting Patriot Federal started in 2002 and culminated with the bank's opening in late 2005 in Canajoharie. In 2007, Patriot branched out from its Canajoharie home and came to Johnstown. Most recently, the bank moved from a leased facility between Friendly's and Pizza Hut on North Comrie Avenue to its new building up the street near Ruby & Quiri.
"The nice thing about [the new facility] is the relatively easy access," Coleman said. "You've got the turning lane in the middle of [Route] 30A there. It sits nicely up on the hill. It's not congested. It's extremely visible. Because down there in that little valley we were in, you've got Friendly's on one side, Pizza Hut on the other."
Coleman also said the new facility, which at 18,000 square feet is smaller than the Johnstown branch's previous location, is more modern and energy efficient, saving the bank money.
"I got our first National Grid bill about a week or two ago, and it's about 45 percent of what it cost to operate the other building."
To date, the Johnstown branch has accumulated about $40 million in deposits.
"This Johnstown-Gloversville area has been very good to us," Coleman said.
According to the Department of Thrift Supervision, about half of Patriot Federal Bank's assets - totaled from both the Johnstown and Canajoharie branches - got about half its business from residential mortgages. About 14 percent came from non-residential mortgages and 10 percent came from commercial non-mortgage loans, and consumer loans come in at 3 percent.
Coleman said a community bank has several advantages over a regionally owned bank with decisions coming from out of town. He said the bank's loan rates are competitive and the decision-makers are in the branches.
"You're much more nimble," he said. "All of our employees are from either Fulton or Montgomery counties. We know our customers and our customers know us. Even today with the technology, anything the big guys have a smaller player can have."
The bank has found success, but it didn't have an easy time getting started.
After the process started in 2002, the organizers filed their application with the Office of Thrift Supervision, and Coleman described their capital offering as "fair," only hitting 70 percent of their goal.
By February 2005, Coleman said the organizers had ceased the project.
Coleman got a call from the chief financial officer of TrustCo bank, which was looking to sell its Canajoharie branch and all of its deposits.
From August to November, the Patriot Federal organizers - 14 now remained of the original 18 - carried out another capital offering, with a goal of between $7.5 million and $9.5 million.
They raised $8.3 million in capital, and the new bank opened Dec. 5, 2005, at the Canajoharie site.
Coleman said during the capital offering, the organizers had received a "tremendous response" from Fulton County.
"The light bulb went on relative to 'you know, this is probably a good opportunity for us here in Fulton County.'"
By 2007, Patriot Federal opened a branch in Johnstown under the direction of branch Manager Nancy Luey in the former Central National site on North Comrie Avenue.
Now, with its new facility open, Patriot Federal is looking to the future.
"We've got lots of capital," Coleman said. "We're very profitable. My thoughts are that we'll tread water for the next year or two and let the economy straighten itself out. We're always looking for opportunities. If the opportunity presented itself, we'd look to branch again."
Mike Zummo is the business editor. He can be reached at firstname.lastname@example.org.